US sees spike in jobless claims filings, but overall job market remains resilient

The Labor Department reported that the number of jobless claims filed by Americans last week increased to its highest level in a year-and-a-half. The number of people seeking unemployment benefits rose by 22,000, to 264,000, in the week ending May 6. There have been layoffs in the United States, as the 242,000 claims from the previous week were the largest since November 2021.

Weekly fluctuations are smoothed out by the four-week moving average of claims, which increased by 6,000 to 245,250. There were 1.81 million people collecting unemployment benefits as of April 29. This was an increase of 12,000 from the previous week. There were 1.81 million people collecting unemployment benefits as of April 29. This was an increase of 12,000 from the previous week. American workers have amazing job security despite rising interest rates and recession fears.

Despite volatile economic times, U.S. employers added a robust number of jobs in April, evident of a labor market still showing impressive fortitude. The labor market added 253,000 jobs. However, there are concerns with underlying labor market health as hiring was not as strong in February and March compared to previous estimates. Those two months lost 149,000 jobs.

The Federal Reserve (Fed) raised its benchmark interest rate, another quarter point, last week. By raising interest rates 10 times in the past 14 months, one of the Fed’s goals is to reduce the hot job market and offset rising wages. These labor market actions were ineffective until recently. However, reports have shown that U.S. job openings fell to the lowest levels in almost two years for the month of March.

The Fed is anticipating an economic slowdown by lowering growth just enough and bring inflation under control without pushing the nation into a recession, known as a soft landing. Nevertheless, there are doubts among economists, who are forecasting a U.S. recession in late 2019.  

Several IT firms sprang into rapid expansion during the pandemic, only to suffer a subsequent surge in layoffs.  Recent layoff announcements have come from IBM, Lyft, Twitter, DoorDash, Salesforce, and Microsoft. Morgan Stanley, McDonald’s, and 3M have recently reported layoffs, indicating widespread staff reductions across sectors.

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